"Egalitarianism and Inflation" by Ayn Rand

The classic example of vicious irresponsibility is the story of Emperor Nero, who fiddled or sang poetry by Rom Bernd. An example of similar behavior may be seen today in a less dramatic form. There is nothing imperial about the actors. They are not one single bloated monster, but a swarm of undernourished professors. There is nothing resembling poetry, even bad poetry, in the sounds they make except for pretentiousness. But they are prancing around the fire and while chanting that they want to help, are pouring paper refuse on the flames. They are those amorphous intellectuals who are preaching egalitarianism to a leaderless country on the edge of an unprecedented disaster. Egalitarianism is so evil that and so silly a doctrine that it deserves no serious study or discussion. But that doctrine has a certain diagnostic value. It is the open confession of the hidden disease that has been eating away the insides of civilization for two centuries or longer. Under many disguises and cover ups, like the half witted member of a family struggling to preserve a reputable friend, egalitarianism has escaped from a dark closet and is screaming to the world that the motive of its compassionate, humanitarian, altruistic, collectivist brothers is not the desire to help the poor, but to destroy the competent. The motive is hatred of the good for being the good, a hatred focused specifically on the fountainhead of all goods, spiritual or material, the men of ability. The mental process underlying the egalitarians hope to achieve their goal consists of three steps. One, they believe that that which they refuse to identify does not exist two, therefore human ability does not exist and three, therefore they are free to devise social schemes and which would obliterate this non existent. Of special significance to the present discussion is the egalitarian's defiance of the law of causality, their demand for equal results from unequal causes or equal rewards for unequal performance. As an example, I shall quote from a review by Bennett M. Berger, professor of sociology at the University of California at San Diego, in the New York Times Book Review, January 6, 1974. The review discusses a book entitled More Equality by Herbert Ganz. I have not read and do not intend to read that book. It is the reviewer's own notions that are particularly interesting and revealing. Quote Herbert Ganz makes it clear from the start, writes Mr. Berger, that he is not talking about equality of opportunity, which almost nobody seems to be against anymore, but about equality of results, what used to be called equality of condition. What he cares most about is reducing inequalities of income, wealth and political power. More equality could be achieved, according to Gantz, by income redistribution, mostly through aversion of the credit income tax, and by decentralizations of power ranging from more equality in hierarchical organizations, for example, corporations and universities, to a kind of community control that would provide to those minorities most victimized by inequality some insulation against being consistently outvoted by the relatively affluent majorities of the larger political constituencies. Close quote if being consistently outvoted is a social injustice, what about big businessmen who are the smallest minority and would always be consistently outvoted by other groups? Mr. Berger does not say. But since he consistently equates economic power with political power and seems to believe that money can buy anything, one can guess what his answer would be. And in any case, he is not an admirer of democracy. Mr. Berger reveals some of his motivation when he describes Herbert Gantz as a policy scientist who suffers from a certain malaise. Quote Part of this malaise is a nightmare in which the policy scientist, not poorly prepared, but in full possession of the facts, reasons and plans he needs to promote persuasively the changes he advocates, is frustrated, defeated, humiliated by congressional committees and executive staffs, politically beholden to the constituencies and the patrons who keep them in office. Close quotes in other words, they did not let him have his way. Lest you think it is only material wealth that Mr. Berger is out to destroy, consider the following quote. Decentralization of power, for example, doesn't necessarily produce more equality. Even the direct democracy of the New England town meeting does very little to read the local political community of the excessive influence exercised by the more educated, the more articulate, the more politically hip. Close quote this means that the educated and the ignorant, the articulate and the incoherent, the politically active and the passive or inert, should have an influence and an equal power over everyone's life. There is only one instrument that can create an equality of this kind a gun. Mr. Berger stresses that he agrees with Mr. Gantz's egalitarian goal, but he doubts that it can be achieved by the open advocacy of more equality. And with remarkably open cynicism, Mr. Berger suggests another strategy. Quote the advocacy of equality inevitably comes into conflict with other liberal values such as individualism and achievement. But the advocacy of citizenship does not. And the history of democracy is a history of political struggles to win more and more rights for more and more people, to bring ever larger proportions of the population to fully functioning citizenship. In the 20th century, there have been struggles to remove racial and sexual impediments, to win rights to decent housing, medical care, education, all on the grounds not of equality, but on the grounds that they are necessary conditions for citizens, equal by definition, to exercise their responsibility to govern themselves. Who knows what rights lie over the horizon? A right to orgasm, to feel beautiful. I think this will make people better citizens. Close quote in other words, he suggests that egalitarian goals can be achieved by blowing up the the term citizenship into a totalitarian concept that is a concept embracing all of life. If Mr. Berger is that open in advising the setting up of an ideological booby trap, who are the boobs he expects to catch? The under endowed? The general public or the intellectuals whom he tempts with such bait as a right to orgasm in exchange for forgetting individualism and achievement? I hope your guess is as good as mine. I will not argue against egalitarian doctrines by defending individualism, achievement and men of ability. Not after writing Atlas Shrugged. I will let reality speak for me. It usually does. Under the heading of Allende's Legacy, an article in the Wall street journal of April 19, 1974 offer some concrete real life example of what happens when income, wealth and power are distributed equally among all men, regardless of their competence, character, knowledge, achievement or brains. By the time the military acted and were climbing at the rate of 3% a day, at the very end the national treasury was practically empty. Close quote the socialist government had seized a number of American owned industrial firms. The new military government invited the American managements to come back. Most of them accepted. Among them was the Dow Chemical Company which owned a plastics plant in Chile. Bob G. Caldwell, Dahl's director of operations for South America, came with a technical team to inspect the remains of their plant. Quote what we found was unbelievable to us. He recalls. The plant was still operable, but in another six months we wouldn't have had any plant at all. They never checked anything. We found valves that hadn't been maintained, leaking corrosive chemicals that would have eventually eaten away practically everything. Worse yet, the highly inflammable chemicals handled at the plant were in imminent danger of blowing up. Safety went to pot. Mr. Caldwell says the fire sprinkling system was disconnected and the valves taken away for some other use outside. Then they were smoking in the most dangerous areas. They told us you didn't have any fires, what? While you were here before. So it must not be as dangerous as you said. Close quote. I submit that the mentality represented by this last sentence, a mentality capable of functioning in this manner, is the loathsomely evil root of all human evil. Apparently some mentalities in the new Chilean government belong to the same category. They have the same range and scope, but the consequences of their actions are not so immediately perceivable, though not much further away. In order to avoid labor disputes, the new government had frozen all labor contracts in the form and on the terms established under the Allende regime. For example, the Dow company's contract includes, quote, a requirement that all the plants plastic scrap be given to the union, which then sells it. We hope to get that one changed, a company official says, because it's a clear incentive to produce almost nothing but scrap. Then there is the case of a big Santiago textile firm. Its contract with 1300 workers virtually guarantees bankruptcy. The textile firm's employees get a certain amount of cloth free as part of their wages and can buy unlimited quantities at a 37% discount. At those prices, Crisis. The firm loses money. Under President Allende, the workers sold the clothes on the black market at huge profits, and it was an important factor in assuring their backing for the Allende government. Close quote how long can a company or a country or mankind survive under a policy of this sort of Most people today do not see the answer, but some do. Material shortages are the consequence of another, much more profound shortage, which is created by egalitarian governments and ignored by the public until it is too late. Chile's experiment with Marxism has also left the country with a shortage of engineers and technicians that could reach serious proportions. Thousands of them left during the Allende regime despite incentives offered by the junta. They haven't been coming back, and many more key people continue to leave for higher paying jobs abroad. Here in Chile, says a business executive, we must get used to the fact that good people must be paid well. But here in the United States, we we are told to get used to the idea that they must not. There is no such thing as good people, cries Professor Berger or Professor Gans or Professor Rawls. And if some are good, it's because they're exploiting those who aren't. There is no such thing as key people, says Professor Berger. We're all equal by definition. No, says Professor Rawls. Some were born with unfair advantages such as intelligence. And he does this is not a paraphrase and should be made to atone for it to those who weren't. We want more equality, says Professor Ganz, so that those who devise sprinkler systems and those who smoke around inflammable chemicals would have equal to equal influence and an equal voice in the community. Control of science and production. The term brain drain is known the world over. It names a problem which various governments are beginning to recognize and are trying to solve by chaining the men of ability to their home homeland. Yet social theoreticians see no connection between intelligence and production. The best among men are running from every corner and slave pen of the globe, running in search of freedom. Their refusal to cooperate with slave drivers is the noblest moral action they could take and incidentally, the greatest service they could render mankind. But they don't know it. No voices are raised anywhere in their honor, in acknowledgment of their value, in recognition of their importance. Those whose job it is to know, those who profess concern with the plight of the world, look on and say nothing. The intellectuals turn their eyes away, refusing to know. The practical men do know, but keep silent. One can't blame the dazed brutes of Chile who swoop down on an industrial plant and cavort at a black market fiesta for not understanding that the plant cannot run at a loss. If their social superiors tell them that they are entitled to more equality. One can't blame savages for not understanding that everything has its price. And what they steal, seize or extort to today will be paid for by their own starvation tomorrow. If their social superiors in management offices, in university classrooms, in newspaper counts, in parliamentary halls are afraid to tell them what are all those people counting on? If a Chilean factory goes bankrupt, the equalizers will find another factory to lose. If that other factory starts crumbling, it will get a loan from the bank. If the bank has no money, it will get a loan from the government. If the government has no money, it will get a loan from a foreign government. If no foreign government has any money, all of them will get a loan from the United States. What they don't know, and neither does this country, is that the United States is broke. Justice does exist in the world, whether people choose to practice it or not. The men of ability are being avenged. The avenger is reality. Its weapon is slow, silent, invisible, and men perceive it only by its consequences, by the guttered ruins and the moans of agony it leaves in its wake. The name of the weapon is inflation. Inflation is a man made scourge, made possible by the fact that most men do not understand. Is a crime committed on so large a scale that its size is its protection. The integrating capacity of the victims minds breaks down before the magnitude and the seeming complexity of the crime which permits it to be committed openly in public. For centuries, inflation has been wrecking one country after another. Yet men learn nothing, offer no resistance and perish. Not like Animals driven to slaughter, but worse, like animals stampeding in search of a butcher. If I told you that the precondition of inflation is psycho epistemological, that inflation is hidden under perceptual illusions created by broken conceptual links, you would not understand me. That is what I propose to explain and to prove. Let us start at the beginning. Observe the fact that as a human being you are compelled by nature to eat at least once a day. In a modern American city, this is not a major problem. You can carry your sustenance in your pocket in the form of a few coins. You can give it no thought. You can scare skip meals and when you're hungry, you can grab a sandwich or open a can of food, which you believe will always be there. But project what the necessity to eat would mean in nature. That is, if you were alone in the primeval wilderness hunger, nature's ultimatum would make demands on you daily. But the satisfaction of demands would not be available immediately. The satisfaction takes time and tools. It takes time to hunt and to make your weapons. You have other needs as well. You need clothing. It takes time to kill a leopard and to get its skin. You need shelter. It takes time to build a hut and food to sustain you while you're building it. The satisfaction of your daily physical needs would absorb all of your time. Observe that time is the price of your survival and that it has to be paid in advance. Would it make any difference if there were 10 of you instead of one? If there were a hundred of you, a thousand, one hundred thousand. Do not let the numbers confuse you in regard to nature. The facts would remain inexorably the same. Socially, the large numbers may enable some men to enslave others and to live without effort. But unless a sufficient number of men are able to hunt, all of you will perish and so will your rulers. The issue becomes much clearer when you discover agriculture. You can survive more safely and comfortably by planting seeds and collecting a harvest months later, on conditions that you comply with two absolutes of of nature. You must save enough of your harvest to feed you until the next harvest. And above all, you must save enough seed to plant your next harvest. You may run short on your own food, you may have to skimp and go half hungry, but under penalty of death, you do not touch your stock seed. If you do, you're through. Agriculture is the first step over civilization because it requires a significant advance in man's conceptual development. It requires that they grasp two cardinal concepts which the perceptual, concrete bound mentality of the Hunters could not grasp. Time and savings. Once you grasp this, you have grasped the three essentials of human time, savings, production. You have grasped the fact that production is not a matter confined to the immediate moment, but a continuous process, and that production is fueled by previous production. The concept of stag seed unites the three essentials and applies not merely to agriculture, but much, much more widely to all forms of productive work. Anything above the level of a savage's precarious hand to mouth existence requires savings. Savings by time. If you live on a self sustaining farm, you save your grain. You need the saved harvest of your good years to carry you through the bad ones. You need your saved seed to expand your production to plant a larger field. The safer your supply of food, the more time it buys for the upkeep or improvement of the other things you need. Your clothing, your shelter, your water well, your livestock, and above all, your tools, such as your plow. You make a gigantic step forward when you discover that you can trade with other farmers. Which leads you all to the discovery of the road to an advanced civilization. The division of labor. Let us say that there are a hundred of you. Each learns to specialize in the production of some goods needed by all. And you trade your products by direct barter. All of you become more expert at your tasks, therefore more productive. Therefore your time brings you better returns. On a self sustaining farm, your savings consisted mainly of stored grain and foodstuffs. But grain and foodstuffs are perishable and cannot be kept for long. So you ate what you could not save. Your time range was limited. Now your horizon has been pushed immeasurably farther. You don't have to expand the storage of your food. You can trade your grain for some commodity which will keep longer and which you can trade for food when you need it, but which commodity? It is thus that you arrive at the next gigantic discovery you devise. A tool of exchange. Money. Money is the tool of men who have reached a high level of productivity and a long range control over their lives. Money is not merely a tool of exchange. Much more importantly, it is a tool of saving which permits delayed consumption and buys time for future production. To fulfill this requirement, money has to be some material commodity which is imperishable, rare, homogeneous, easily stored, not subject to wide fluctuations of value, and always in demand among those you trade with. This leads you to the decision to use gold as money. Gold. Money is a tangible value in itself and a token of wealth actually produced. When you accept a gold coin in payment for your goods, you actually deliver the goods to the buyer. The transaction is as safe as simple barter. When you store your savings in the form of gold coins, they represent the goods which you have actually produced and which have gone to buy time for other producers who will keep the productive process going so that you'll be able to trade your coins for goods anytime you wish. Now project. What would happen to your community of a hundred hard working, prosperous, forward moving people if one man were allowed to trade on your market not by means of gold, but by means of paper. That is, if he paid you not with a material commodity, not with goods he had actually produced, but merely with a promissory note on his future production. This man takes your goods, but does not use them to support his own production. He does not produce at all. He merely consumes the goods. Then he pays you higher prices for more goods, again in promissory notes, assuring you that he is your best customer who expands your market. Then one day, a struggling young farmer who suffered from a bad flood wants to buy some grain from you. But your price has risen and you haven't much grain to spare, so he goes bankrupt. Then the dairy farmer to whom he owed money raises the price of milk to make up for the loss. And the truck farmer, who needs the milk, gives up buying the eggs he had always bought. And the poultry farmer kills some of his chickens which he can't afford to feed. And the alfalfa grower, who can't afford the higher price of eggs, sells some of his stock seed and cuts back down on his planting. And the dairy farmer can't afford the higher price of alfalfa, so he cancels his order to the blacksmith. And the blacksmith has gone. And you want to buy the new plow you have been saving for, but the blacksmiths has gone bankrupt. Then all of you present the promissory notes to your best customer. And you discover that they were promissory notes not on his future production, but on yours only. You have nothing left to produce with. Your land is there, your structures are there. But there is no food to sustain you through the coming winter, and no stock seed to plant. Would it make any difference if that community consisted of a thousand farmers? 100,000, a million, 211 million, the entire globe? No matter how widely you spread the blight, no matter what variety of products and what incalculable complexity of deals become involved? This, ladies and gentlemen, is the cause, the pattern and the outcome of inflation. There is only one institution that can arrogate to itself the power legally to trade by means of rubber checks. The government, and it is the only institution that can mortgage your future without your knowledge or consent. Government securities and paper money are promissory notes on your on future tax receipts, that is, on your future production. Now project the mentality of a savage who can grasp nothing but the concretes of the immediate moment and who finds himself transported into the midst of a modern industrial civilization. If he is an intelligent savage, he will acquire a smattering of knowledge, but there are two concepts he will not be able to grasp. Credit and market. He observes that people get food, clothes, and all sorts of objects simply representing pieces of paper called checks. And he observes that skyscrapers and gigantic factories spring out of the ground at the command of very rich men whose bookkeepers keep switching magic figures from the ledgers of one to those of another and another and another. This seems to be done faster than he can follow. So he concludes that speed is the secret of the magic power of paper, and that everyone will work and produce and prosper so long as those checks are passed from hand to hand fast enough. If that savage breaks into print with his discovery, he will find that he has been anticipated by John Maynard Keynes. Then the savage observes that the department stores are full of wonderful goods, but people do not seem to buy them. Why is that? He asks a floor walker. We don't have enough of a market, the floor walker tells him. What is that? He asks. Well, his new teacher answers, goods are produced for people to consume. It's the consumers that make the world go around. But we don't have enough consumers. Is that so? Says Savage, his eyes flashing with the fire of a new idea. Next day he obtains a check from a big educational foundation. He hires a plane. He flies away and comes back a while later, bringing his entire naked, barefoot tribe along. You don't know how good they are at consuming, he tells. He tells his friend the floor walker, and there's plenty more where this came from. Pretty soon you'll get a raise in pay. But the store pretty soon goes bankrupt. The poor savage is unable to understand it to this day, because he had made sure that many, many people agreed with his idea. Among them many noble tribal chiefs such as Governor Romney who sang incantations to consumerism, and Warrior Nader who fought for the consumers rights and big business chieftains who recited formulas about serving the consumers, and chiefs who sat in Congress and chiefs in the White House, and chiefs in every government in Europe, and many more professors than he could count. Perhaps it is harder for us to understand that the mentality of that savage has been ruling Western civilization for almost a century. Trained in college to believe that to look beyond the immediate moment, to look for causes or to foresee consequences is impossible. Modern men have developed context dropping as their normal method of cognition. Observing a bad small town shopkeeper, the kind who is doomed to fail. They believe, as he does, that lack of customers is his only problem and that the question of the goods he sells or where these goods come from has nothing to do with it. The goods they believe, are here and will always be here. Therefore, they conclude, the consumer, not the producer, is the motor of an economy. Let extend credit, that is our savings to the consumers they advise, in order to expand the market for our goods. But in fact, consumers qua consumers, are not part of anyone's market qua consumers, they are irrelevant to economics. Nature does not grant anyone an innate title of consumer. It is a title that has to be earned by production. Only producers consider the market only men who trade products or services for products or services. In the role of producers, they represent a market supply. In the role of consumers, they represent a market's demand. The law of supply and demand has an implicit sub clause that it involves the same people in both capacities. When this subclause is forgotten, ignored or evaded, you get the economic situation of today. A successful producer can support many people, for example his children, by delegating to them his market power of consumer. Can that capacity be unlimited? How many men would you be able to feed on a self sustaining farm? In more primitive times, farmers used to raise large families in order to obtain farm labor, that is productive help. How many non productive people could you support by your own effort if the number were unlimited? If demand became greater than supply? If demand were turned into a command, as it is today, you would have to use and exhaust your stock seed. This is the process now going on in this country. There is only one institution that could bring it about, the government, with the help of a vicious doctrine that serves as a cover up. Altruism. The visible profiteers of altruism, the welfare recipients, are part victims, part window dressing for the status policies of the government. But no government could have gotten away with it if people had grasped the other concept which the savage was unable to grasp, the concept of credit. If you understand the function of stock seed of savings in a primitive farm community, apply the same principle to a complex industrial economy. Wealth represents goods which have been produced but not consumed. What would a man do with his wealth? In terms of direct pattern, let us say a Successful shoe manufacturer wants to enlarge his production. His wealth consists of shoes. He trades some shoes for the things he needs as a consumer. But he saves a large number of shoes and trades them for building materials, machinery and labor to build a new factory. And another large number of shoes for raw materials and for the food of the workers he will employ to manufacture more shoes. Money facilitates this trading, but does not change its nature. All the physical goods and services he needs for his project must actually exist and be available for trade, just as his payment for them must actually exist in the form of physical goods, in this case, shoes. An exchange of paper money or even of gold coins would not do any good to any of the parties involved if the physical things they need were not there and could not be obtained in exchange for the money. If a man does not consume his goods at once, but saves them for the future, whether he wants to enlarge his production or to live on his savings which he holds in the form of money, in either case, he is counting on the fact that he will be able to exchange his money for for the things he needs when and as he needs them. This means that he is relying on a continuous process of production, which requires an uninterrupted flow of goods saved to fuel further and further production. This flow is investment capital, the stock seed of industry. When a rich man lends money to others who needed to finance their production, what he lends to them is the goods which he has not consumed. This is the meaning of the concept investment. If you have wondered how one can start producing when nature requires time paid in advance. This is the beneficent process that enables man to do it. A successful man lends his goods to a promising beginner or or to any reputable producer in exchange for the payment of interest. The payment is for the risk he is taking. Nature does not guarantee man's success, neither in a farm nor in a factory. If the venture fails, it means that the goods have been consumed without a productive return, so the investor loses his money. If the venture succeeds, the producer pays the interest out of the new good, the profits which the investment enabled him to make. Observe and bear in mind above all else that this process applies only to financing the needs of production, not of consumption, and that its success rests on the investor's judgment of man's productive ability, not on his compassion for their feelings, hopes or dreams. Such is the meaning of the term credit in all its countless variations and applications. Credit means money, that is unconsumed goods loaned by one productive person or group to another to be repaid out of future production. Even the credit extended for a consumption purpose, such as the purchase of an automobile, is based on the productive record and prospect of the borrower. Credit is not, as the savage believed, a magic piece of paper that reverses cause and effect and transforms consumption into a source of production. Consumption is the final, not the efficient cause of production. The efficient cause is savings, which can be said to represent the opposite of consumption. They represent unconsumed goods. Consumption is the end of production and a dead end as far as the productive process is concerned. The worker who produces so little that he consumes everything he earns, carries his own weight economically, but contributes nothing to future production. The worker who has a modest savings account and a millionaire who invests a fortune, and all the men in between are those who finance the future. The man who consumes without producing is a parasite, whether he is a welfare recipient or a rich playboy. An industrial future oriented economy is enormously complex. It involves calculations of time, of motion, of credit, and long sequences of interlocking contractual exchanges. This complexity is the system's great virtue and the source of its vulnerability. The vulnerability is psycho epistemological. No human mind and no computer and no planner can grasp the complexity in every detail. Even to grasp the principles that rule it is a major feat of abstraction. This is where the conceptual links of men's integrating capacity break down. Most people are unable to grasp the working of their hometown's economy, let alone the countries or the world under the influence of today's mind. Shrinking anti conceptual education. Most people tend to see economic problems in terms of immediate of their paychecks, their landlords and the corner grocery stores. The most disastrous loss which broke their tie to reality is the loss of the concept that money stands for existing but consumed goods. The system's complexity serves occasionally as a temporary cover for the operations of some shady characters. You have all heard of some manipulator who does not but lives in luxury by obtaining a loan, which he repays by obtaining another loan elsewhere, which he repays by obtaining another loan, etc. He crashes. But what if that manipulator is the government? The government is not a productive enterprise. It produces nothing in respect to its legitimate functions, which are the police, the army, the law courts. It performs a service needed by a productive economy. When a government steps beyond these functions, it becomes an economy's destroyer. The government has no source of revenue except the taxes paid by the producers. To free itself for a while from the limits set by reality. The government initiates a credit card game on a scale which the private manipulator could not dream of. It borrows money from you today, which is to be repaid with money it will borrow from you tomorrow, which is to be repaid with money it will borrow from you day after tomorrow, and so on. This is known as deficit financing. It is made possible by the fact that the government cuts the connection between goods and money. It issues paper money, which is used as a claim check on actually existing goods, but it is not backed by any goods. It is not backed by gold. It is backed by nothing. It is a promissory note issued to you in exchange for your goods to be paid by you in the form of taxes out of your future production. Where does your money go? Anywhere and nowhere. First it goes to establish an altruistic excuse and window dressing for the rest, to establish a system of subsidized consumption, a welfare class of men who consume without producing a growing dead end imposed on a shrinking production. Then the money goes to subsidize any pressure group, at the expense of any other, to buy their votes, to finance any project conceived at the whim of any bureaucrat or of his friends, to pay for the failure of that project, to start another, etc. The welfare recipients are not the worst part of the producer's burden. The worst part are the bureaucrats, the government officials who are given the power to regulate production. They are not merely unproductive consumers. Their job consists in making it harder and harder and ultimately impossible for the producers to produce. Most of them are men whose ultimate goal is to place all producers in a position of welfare recipients. While the government struggles to save one crumbling enterprise at the expense of the crumbling of another, it accelerates the process of juggling debts, switching losses, filing loans on loans, mortgaging the future and the future's future. As things grow worse, the government protects itself not by contracting, but by expanding this process. The process becomes global. It involves foreign aid and unpaid loans to foreign governments and subsidies to other welfare states, and subsidies to the United nations and subsidies to the World bank and subsidies to foreign producers and credits to foreign consumers to enable them to consume our goods. While simultaneously the American producers who are paying for it all are left without protection. And their properties are seized by any sheet in any past hole of the globe. And the wealth they have created, as well as their energy, is turned against them, as for example, in the case of Mid Eastern Oil. Do you think a spending orgy of this kind could be paid for out of turn? Production? No, the situation is much worse than that. The government is consuming this country's stock seed. The stock seed of industrial production, investment capital, that is the savings needed to keep production going. These savings were not paper, but actual goods. Under all the complexities of private credit. The economy was kept going by the fact that in one form or another, in one place or another, somewhere within it, actual material goods existed to back its financial transactions. It kept going long after the protection was breached. Today, the goods are almost gone. A piece of paper will not feed you when there is no bread to eat. It will not build a factory when there are no steel girders to buy. It will not make shoes when. When there is no leather, no machines, no fuel. You have heard it said that today's economy is afflicted by sudden, unpredictable shortages of various commodities. These are the advanced symptoms of what is to come. You have heard economists say that they are puzzled by the nature of today's problem. They are unable to understand why inflation is accompanied by recession, which is to contrary to all of their Keynesian doctrines. And they have coined a ridiculous name for it, stagflation. Their theories ignored the fact that money can function only so long as it represents actual goods and that at a certain stage of inflating the money supply, the government begins to consume a nation's investment capital, thus making production impossible. The value of the total tangible assets of the United States at present was estimated in terms of $1968 at $3.1 trillion. If government spending continues, that incredible wealth will not save you. You may be left with all the magnificent skyscrapers, the giant factories, the rich farmers plants, but without fuel, without electricity, without transportation, without steel, without paper, without seeds to plant the next harvest. If that time comes, the government will declare explicitly the premise on which it has been acting implicitly that its only capital asset is you. Since you will not be able to work any longer, the government will take over and will make you work on a slope descending to sub industrial production. The only substitute for technological energy is the masculine labor of slaves. This is the way an economic collapse leads to dictatorship, as it did in Germany and in Russia. And if anyone thinks that government planning is a solution to the problems of human survival, observes that after half a century of total dictatorship, Soviet Russia is begging for American wit and for American industrial. Know how a dictatorship would find it impossible to rule this country in the foreseeable future? What is possible is the blind chaos of a civil war. It is at a time like this, in in the face of an approaching economic Collapse that the intellectuals are preaching egalitarian notions. When the curtailment of government spending is imperative, they demand more welfare projects. When the need for men of productive ability is desperate, they demand more equality for the incompetence. When the country needs the accumulation of capital, they demand that we solve the rich. When the country needs more savings, they demand a redistribution of income. They demand more jobs and less profits. More jobs and fewer factories. More jobs and no fuel, no oil, no coal, no pollution. But above all, more goods for free to more consumers. No matter what happens to jobs, to factories or to producers. The results of their Keynesian economics are wrecking every industrial country. But they refuse to question their basic assumptions. The examples of Soviet Russia, of Nazi Germany, of Red China, of Marxist Chile, of socialist England are multiplying around them. But they refuse to see and to learn. Today, production is the world's most urgent need and a threat. Starvation is spreading through the globe. The intellectuals know the only economic system that can and did produce unlimited abundance. But they give it no thought and keep silent about it as if it had never existed. It is almost irrelevant to blame them for their default at the task of intellectual leadership. The smallness of their status stature is overwhelming. Is there any hope for the future of this country? Yes, there is. This country has one asset left, the matchless productive ability of its people. If, and to the extent that this ability is liberated, we might still have a chance to avoid the collapse. We cannot expect to reach the ideal overnight. But we must at least reveal its name. We must reveal to this country the secret which all those posturing intellectuals of any political denomination who clamor for openness and truth are trying so hard to cover up that the name of that miraculous productive system is capitalism. As to such things as taxes and rebuilding of a country, I will say that in his goals, if not his methods, the best economist in Atlas Shrugged was Ragnar Danniskild.

How much time would you give this? What chance? Well, that would be. Please wait a minute. It is important. Important that others should hear your question. And unfortunately I have to be the conduit. So be patient and come again.

What?

What chance do you think the country has?

I don't know by what, in what terms you would measure. All depends on you and me and the public in general. People have free will, and therefore we may have a very good chance or none at all. Nobody can make that guess.

Further question. Yes.

Come on.

How, if at all, do the rights of young children? How, if at all the rights of young children differ from adults Particularly when the child is confronted with the necessity for parental support.

For parental support? Support?

Well, the child two ways, can't it? The necessity of the parent to support the child and the child later to support the parent. Which is it you're after? Do the rights of a child differ.

From the rights of an adult? All right.

Do the rights of a child differ from the rights of an adult?

Yes and no. From two different aspects. Yes, in the sense that the child has a right to life and liberty in the pursuit of happiness. Except that all these rights are based on a man's rational knowledge and understanding. An infant cannot earn his own sustenance, nor can a child exercise his rights, nor what the pursuit of happiness means, nor know what. What freedom is and how to use it. All human rights depend on his nature as a rational being. Therefore, the child has to wait until he has developed his mind and acquired enough knowledge to be able to come into full, independent exercise of his rights. While he is a child. He has to be supported by his parents. Either he, nor I, nor you, nor nature gives him any choice about it. Or rather, none of us can do anything because this is a fact of nature. Proclaiming some kind of rights of childhood isn't going to create those rights. Rights are a concept based on reality. Therefore, a parent would not have the right to starve his child, to neglect him, to injure him physically, or to kill him there. The government has to protect the child just like any other citizen. But the child cannot claim for himself the rights of an adult simply because he is not able. He is not competent to exercise. He has to depend on his parents, and if he doesn't like them, then run away from home as early as you can earn your living, if the government will permit it.

In one of your newsletters you make mention of the tactics of the John Birch Society, but the gentleman says you didn't spell it out. Can you, within the recognized limitations of the time of an answer of this sort, explain further?

No, I don't remember what particular newsletter. I believe I remember mentioning them long ago in the magazine the Objectivist. But in my newsletter. No, I don't remember. I might have mentioned but so much in passing that I wouldn't even remember in what article.

Further question?

Well, I. Yeah, go ahead. I can't give you a discussion on the subject simply because it doesn't interest me very much. I can tell you only in a general way what I've said in the past. There are men who do not stand for capitalism, but against communism, or so they say, and I do not believe that anyone can ever achieve anything by being against something. Being against an enemy is not enough. You have to know what you stand for. And the John Birch Society has never given any evidence of that.

If present national boundaries were transcended by a political institution, would it be possible for the different economy economies throughout the Western world or elsewhere to handle the problem that you have described so gloomily tonight?

Well, it simply means if you have a disease, should you get a more serious form of it, and will that help you? The interdependence of the Western world is based on precisely the the kind of tactics and policies that described here. They are all leaning on one another as bad risks, bad consuming, parasite borrowers. And the United States is the only last pillar they have which they have almost eaten away. Therefore, if anything, the first step of any solution is to break all those foreign obligations and demand payment. If the United States receives some part of the money that the whole world, and most particularly Europe owes it, you might have a renaissance in this country overnight. The trouble is that that money does not exist any longer. All you have there is consumers on a much more advanced stage towards dictatorship than we are. So the less ties we have with any other country, the better off we will be.

Unborn child have any rights with regard to abortion?

No.

Question in the back.

I would like to express my indignation at the idea of confusing a living human human being with an embryo which is only a few undeveloped cells. And don't tell me about abortion at the last minute that when a baby is formed, that's a different issue. The right to abortion means the right to get rid of some cells in your body which you cannot afford to support if it grows into a child. And the idea of sex. Some bitches, and I don't apologize, trying to prescribe to the whole world to all other women what they should do with their lives. It is so disgusting. There is one of those candidates in New York, you fortunately probably have not seen her on television, that am calling it a right to life. Look, as one general principle, you do not say sacrifice to living, the living to the non living. You do not mix an actuality with a potentiality. An unborn child, before it's formed even, is not a man, it is not a living entity and it has no rights whatever the woman has.

For the overwhelming collectivist orientation of the overwhelming number of universities in this country.

I have written about it many times. But to give you a brief answer, you can ascribe it all to the influence of One single man who is really the destroyer of the modern world. Immanuel Kant. All of the universities are under his influence. Every school of modern philosophy is Kantian at root in one form or another. That is the real danger to the Western world.

Think there would be a question with regard to the addition that you would put on. Do you support busing in Boston to attain equal educational opportunities?

I do not support busing anywhere. I do not believe that the government has the right to play politics with children, nor to dispose of their children's education against the wishes of the parents. It is as bad an infringement of rights as any modern action could be. Now, I do not believe in racism. And if you want to see why I don't, I will refer you to my article on racism in the Virtue of Selfishness. Racism, obviously is a primitive, animal form of collectivism, of loyalty to a race, a group, a physiological collective. I'm certainly an enemy of racism, but I do, and I do believe that people should have quality education, but not at government expense. Neither the blacks nor the whites. I do not believe that the government should run schools. I believe education should be public, and then children can go wherever their parents want to send them.

The government should enact civil liberties laws so as to enable people of various groups and others to advance.

No, period.

Do you propose to do with welfare recipients?

Well, you see, I don't think they're my property to dispose of. Wait a minute.

What do you believe so much in Gold. You can't eat it. You can't do anything with it. Except, as you pointed out, you.

Thank you. Exactly. I stated in here why I don't believe in gold. I recognize the fact of the difference between gold and a piece of paper.

Pointed out the necessity for check. But what are the tactics that we should adopt to bring about the change?

Look, there is only so much that one person can do. If I've given you the strategy, you don't expect me also to be some kind of woman on the barricades and lead an army on Washington. It's much too soon for that. What can can one do? If everyone in this room seriously understood the problem and advocated the right measures and spoke to his neighbors, and above all, wrote to his congressman or senator and told them that you will not vote for him if he votes for any more spending. If you did only that much, you could save the country. But I don't believe enough people will do it because those people in Washington take their mail very seriously. But they count noses, so you have to drown them in Mail before they will listen to you. If you can state your case simply, briefly and intelligently, believe me, you would have an enormous influence. That's the only action I can suggest today, because the only action I believe in is intellectual. And to this extent, you might persuade some of them because they also see that the situation is desperate. But unless you speak and speak boldly and preach the right ideas, nothing can be done at all. Because even if all politicians disappeared, let us say, that wouldn't solve problems. People have to know how to organize a proper society. Society and what a proper society is. That is the gap that anyone interested in saving this country should try to feel, explain, talk, talk and write. I mean, not books. Write to congressmen. This will help a great deal, and it's much quicker.

Further questions? Just one minute. A gentleman says that in his opinion, the citizens of Boston are being subjected to two evils. One is the forced busing, and secondly is news censorship. And he asked your opinion as to what the people of Boston should do relative to Judge Garrity's decision and its effect in so far as he is concerned, in bringing about what he regards as and evil.

What is the decision? I'm sorry that I do not know. A censorship decision?

No, no, no, no. The censorship arises out of what this gentleman asserts is the coverage by the Boston papers of what occurred during the troubles involving busing. So that the Judge Garrity's decision is simply upholding the constitutionality of the busing in order to enable children to receive quality education that they are being denied in the schools that they're going to.

But now, why would you call this censorship? I do not know the details of your events here, but if I understand correctly, a judge does not make the law. He has to uphold it, such as it is. And if the law calls for passing, then it is not up to him to change it. It's up to you. You have to use your influence in Washington to repeal that law, not through a constitutional amendment, because that's really too small an issue, too little a detail to load the Constitution with. But if you object to it, take legal channels and above all, make yourself heard. Protest is what impresses people, but make sure that you give the right reasons. If you make it an issue of rights, you might succeed. If you make it an issue of racism, you will necessarily defeat yourself. If the issue here is that. That the government has no right to direct the education of children, you will have a good case. If you say you just don't want to go to school with some particular children and make it an issue not of freedom of choice, but of race. You will be defeated for sure because right will be on the opposite side. Or rather, as in so many issues today, it will be nowhere. It will perish between two sides, both of which are wrong. Make it an issue of individual rights. Take it to the Supreme Court if necessary, if you can present the proper case. But don't blame the local judge, he can't help it.

Further back.

Come on.

Do you think Alan Greenspan will be able to accomplish in his present role.

The first part of the question?

But this part of the question had to do within the fountainhead. You discuss the individual as opposed to board.

Oh, I do not know what Allen Ginsburg will be able to accomplish. I don't think he can know. Nobody knows. All we know is only this. The situation is desperate. 5 years ago Alan Greenspan wouldn't have considered going to Washington. He's not interested in political career. It is precisely because the situation is desperate that he accepted that invitation on the chance that he might be able to persuade some honest people in Washington who literally are helpless but know that the situation is terribly dangerous. Nobody can foretell what any one person will do, particularly in politics. A single individual like Rourke against the board of private individual has a very good chance because if he doesn't agree with one board he can go to 10 others or to a single private client. But in today's situation in Washington and there are a number of men there who are intelligent and good, particularly in economics, and they understand the situation, I do not know whether any of them can do anything because remember, the executive branch does not write the laws. It's up to Congress and Congress is afraid of its constituents. So that indirectly it's really up to public opinion. But to the extent to which Alan Ginspin might succeed in some aspect of something or in softening some disaster, to that extent he will save time for all of us and maybe our lives. I hope so, but I would not predict anything. Nobody can tell.

To shed some light upon the theory of the certain right wing organizations that the communists have connections with certain financial agents and agencies in Western Europe and in this country.

I don't know anything about it. Nobody has given any evidence of that. That's the conspiracy theory of history. Let's someone prove it then. It might be worth looking at. But it is such a preposterous impossibility that it's like the dark myth that flow around because people are unable to understand the events.

The magazine says the gentleman has Reported that you are writing a new novel. If that is so, would you be willing to discuss the theme, why you are doing it and when will it appear?

I am not writing it. I'm working on it very, very slowly because my time is taken up with the Iron man letter. I have no idea when I will begin it, let alone finish it.

The movie status of Atlas Shrugged that.

It'S safely in my possession.

Gentleman says that the Libertarian Party would join in your expression of the necessity of talking to neighbors and undertaking to persuade them to bring about the sort of thing you are advocating. If that is so, why are you opposed to the Libertarian Party?

It is not so. They are not defenders of capitalism. They are a group of publicity seekers who rush into poverty politics prematurely because they want to educate the people allegedly through a political campaign which cannot be done. Therefore, I regard the whole thing as publicity seeking. Add to it the fact that such membership of their leadership as I've heard about consists of men of every kind of persuasion, from religious conservatives to anarchists who might as well join the Communist Party or the Socialist Workers Party as far as any ideological consistency or firmness is concerned. And does it astonish you or not that most of those men are my enemies and spend their time denouncing me while they're plagiarizing my ideas without taking whole passages, without credit. Now, you know, I think it's a very bad beginning for an allegedly pro capitalist party to start by stealing ideas.

Your opinion of the junta that overturned Ali Ende and the statement of the. Of the gentleman is that the junta tortured and massacred thousands.

Those stories I don't believe I would want to have proof from some authorities better than the extreme left. But I express my opinion of the junta. I don't think that they have any idea what they're doing. I don't think they know what they want. If they do, they're going about it the wrong way. I think they're immeasurably better than the Allende government. But I don't believe they will be able to achieve much because the country is wrecked. I don't know any signs of their ideology. They had none before, which is what permitted Allende, who was incidentally a minority government. He did not get a real majority, but it was made possible by the fact that his opposition didn't have any particular program and experience has not given them any particular program. But compared to Allende, I would say they are gentlemen and scholars and giants.

To comment upon what this gentleman says, that he understood that parts of the Fountainhead were based upon the life of Frank Lloyd Wright. The character was based on Frank Lloyd Wright?

The character? Absolutely not. Some of his architectural ideas and the pattern of his career? Yes, definitely, because I admire Wright very much as an architect, but as a person, as character, as the content of Rourke's philosophy. He is almost the opposite of Frank Lloyd Wright. No connection at all.

You'll be willing to shed some light upon the philosophical split between you and Nathaniel Brandon?

I have shed that light long ago and you may look it up if you wish.

Wait a minute. In the event that you rewrote your novel, would you liberate. Would you liberate some of the female characters?

Would you ask the gentleman to name the passages, please?

Will you name the characters passages?

Patrick Rug.

This gentleman says that the heroine seems to submit subject herself to certain passive behavior in connection with romantic episodes.

Well, she's very passive. In Ethelshock, she's almost raped three times by the three men in her life. The heroine of the Fountainhead is literally raped. If this is passivity, make the most of it.

The young lady says that she has not noticed any mention of music in your writing, Beethoven's music in your writings. And she wonders whether you will comment as to your reaction to Beethoven's composition.

Well, the only time I ever mentioned composers by name was in the Fountainhead when I mentioned Rachmaninoff and Tchaikovsky, who happened to be my favorites. And that leaves an awful lot of composers whom I have not mentioned. There is no reason for me to. But I'll be glad to tell you I do not like Beethoven. I can recognize that he's a great musician, but if you have read my theory of aesthetics, his sense of life is the exact opposite of mine. He is a giant representing the malevolent universe. The Byronic or hopeless or doomed view of life. That's the exact opposite of what I stand for.

Should a woman worship the metaphysical concepts of masculinity which he attributes to you in your writings?

That is quite true. I wouldn't put it metaphysically in that form. I'd put it much simpler. I am a man worshipper and my heroines are man worshippers. And there's only two things I could do on this question. Either speak for 10 hours or write a volume which I would not convince you or simply say to me it's self evident and I will do. The second.

Woman in any field or activity today whom you really would be willing to comment upon because you admire such woman.

Oh, yeah, there are some Greta Garbo, Katharine Hepburn, as she wasn't her use, not her political ideas nor her behavior today, but as she was in her younger days, she was a great actress. Marlene Dietrich, less so now. You want intellectual women. Oh, yes, I can. I can. Agatha Christie. No, I mean it does that. That is a woman with the most prodigious, magnificent talent for what I regard as the most important aspect of literature. Plot, imagination. And she's over 80. She's written 80 novels in her life and all of them, the least interesting are better than what most other mystery writers write. Is the only woman I can read with the greatest of pleasure. So I really admire her. And the ability to write ingenious plots is certainly a profoundly intellectual ability.

Is your attitude with regard to government support of daycare centers so that women can participate as members of a workforce?

I am against government support of anyone and anything. I'm against government supporting giving subsidies to the. Which company was it in California that got it? Lockheed. I'm opposed to that. And to welfare mothers and to their children. Let them. Each human being struggle on his own. The government has no right and no business to support anyone, big or small, at public expense. That's what my speech today was about. But the peculiar thing and your question is what is the use of arguing about details if you know that one course or another both proceeds from the wrong premise? You have to first establish and accept or reject a basic principle. I reject the principle of the government interference into the economy. Therefore, what's the use if I tell you I prefer mothers unwelfed or in the workforce? All that does not enter into a proper free economy that respects and recognizes individual rights?